Types of Economic Systems and the Economic Continuum

Vocabulary flashcards covering the primary types of economic systems, the three fundamental economic questions, the economic continuum, and the economic profiles of the United Kingdom, Germany, and Russia.

Traditional economy

An economic system that does things how they always have, typically found in indigenous tribes who stay away from cities, with very few societies following it today.

Command economy

An economic system in which the government makes the choices for the economy.

Three basic economic questions

1. What should we produce? 2. How should we produce it? 3. Who gets to use it?

Market economy

An economic system in which economic choices are made by the people and the people own the businesses.

Mixed economy

An economy that is a mix of traditional, market, and command systems; every country in the world falls into this category, classifying as either mixed-market or mixed-command.

Economic continuum

A line showing how different countries' economies work, on which countries receive a score between $0$ (pure command) and $100$ (pure market).

Economic Freedom Score

A score given to every country that measures the amount of freedom people have to make their own economic decisions, such as working, producing, consuming, and spending.

United Kingdom (economic characteristics)

A mixed-market economy where most businesses are privately owned, businesses and consumers make many economic decisions, the government provides services with some economic involvement, and the literacy rate is $99\%$.

Germany (economic characteristics)

A mixed-market economy where most businesses are privately owned, businesses make many economic decisions, the government provides services with some economic involvement, and the literacy rate is $99\%$.

Russia (economic characteristics)

A mixed-market economy with more government involvement than the UK and Germany, government control or influence over major industries, significant oil and natural gas resources, and a $99\%$ literacy rate.